S.D. Retirement System flourishing

Aug. 20, 2013

Rob Wylie (left) is executive director of the South Dakota Retirement System. He is showin in 2010 with Haven Stuck, vice chairman of the State Investment Council, and Matt Clark, state investment officer, before meeting with a South Dakota legislative committee. / AP file photo

Written by

Chet Brokaw

Associated Press

PIERRE — The South Dakota Retirement Systemís assets have grown to a record high of more than $9 billion after earning 19.5 percent on investments in the past fiscal year, officials said Monday.

The systemís assets peaked at about $8.2 billion in 2007 and then plummeted during the recession. Those assets had risen to more than $9 billion by June 30, up more than $1.5 billion for the fiscal year.

South Dakota Investment Council Chairman Hugh Bartels of Watertown said the Investment Office staff in recent years has posted some of its best investment returns in the Retirement Systemís 40-year history.

ďThe staff for the last four years have hit home runs every year. This year, they hit a grand slam walk-off home run,Ē Bartels told a legislative committee.

Bartels told the Executive Board, which handles management issues for the Legislature, that final numbers are not yet compiled, but the stateís Retirement Systemís investment return for the past year is expected to be tops in the nation among similar state pension plans.

Retirement System Director Rob Wylie said unofficial records indicate the system ended the past fiscal year 103 percent funded. That means the South Dakota systemís assets are 103 percent of all future potential future benefits to be paid to retirees in state and local government agencies.

The systemís good financial health means pension payments should increase by 3.1 percent July 1, 2014, the maximum state law allows. When the system is fully funded, pension payments increase by 3.1 percent the following year.

The legislative committee approved the Investment Councilís plan to give investment staff a chance to earn larger bonuses for good results that outperform industry averages. Investment staff now can earn bonuses of up to 100 percent of base salaries. The change would allow them to earn performance bonuses of up to 200 percent of their base salaries.

The bonus system is based on an assumption that investment staff will earn on average only half the maximum bonus available. The change will help retain staff by getting their total pay closer to what they would earn working with a private investment company, Bartels said.